HOUSE BILL NO. 59 "An Act relating to raffles and auctions of certain permits to take big game; and providing for an effective date." REPRESENTATIVE CON BUNDE, sponsor of HB 59, testified in support of the legislation. He noted that the purpose of HB 59 is to allow qualified organizations to raffle or auction big game permits as a revenue source for game management. A qualified organization which auctions a permit can retain a percentage of the sale plus administrative costs, while the remaining amount will be returned to the state for fish and game activities. Representative Bunde observed that HB 59 authorizes the Department of Fish and Game to issue one bison harvest permit each year for a bison from the Delta bison herd. The permit may be auctioned or raffled by a qualified organization on behalf of the Department of Fish and Game. The organization is entitled to receive reimbursement for expenses plus up to ten percent of the net proceeds to use for the promotion of fish and game law enforcement. Representative Bunde observed that the legislation will allow the Department of Fish and Game to issue, through a competitive auction or raffle, up to two harvest permits each year for each of the following species: Dall sheep, bison, musk ox, brown or grizzly bear, moose, caribou, and wolf. The qualified organization that conducts the auction may retain up to ten percent of the profits plus administrative costs. The remaining profit will be deposited into the Fish and Game fund. Representative Bunde noted that there are at least 11 western states that have provisions for auctioning or raffling big game harvest permits. He asserted that every state with a similar program has had a positive impact on their budget. He maintained that the legislation will provide another revenue source for the Dept of Fish and Game and will enable the continuation of game management programs for the common use of the people. Representative Brown asked if there is competition to determine which organizations would be qualified to run the raffles. Representative Bunde noted that the original legislation was crafted for the Alaska Fish and Wildlife Safeguard Association (Safeguard) and only covered bison permits. The legislation was expanded to include competitive auctions. He observed that organizations can approach the Department of Fish and Game with proposals to 4 auction game. The Department of Fish and Game will decide which proposal is the most feasible and lucrative for the state of Alaska. He explained that Safeguard could apply for additional raffles. In response to a question by Representative Brown, Representative Bunde stated that Safeguard realized $3.0 thousand dollars from their bison raffle. He stressed that the organization needs $20.0 thousand dollars to carry out their work. Representative Brown referred to the March 23, 1993 report by the Division of Legislative Audit. The audit noted that Safeguard receives significant state support. She observed that the report recommends that the Department of Fish and Game divorce itself from Safeguard unless the problems identified in the audit report were addressed. Representative Bunde stated that it was his understanding that the problems listed in the audit have been addressed. Representative Brown quoted the audit: "We believe that this diversion of monies from the state General Fund to a private corporation may violate the state constitution. It further erodes the legislature's most significant power, that of appropriation." She questioned the constitutionality of allowing a private organization to benefit from a state resource. Representative Bunde stressed the beneficial nature of Safeguard in assisting fish and wildlife protection. He maintained that Safeguard increases the enforcement capability of the State by encouraging citizens to be involved. In response to a question by Co-Chair Hanley, Representative Brown acknowledged that the audit did not specifically address the permits. She emphasized that the state support to Safeguard is not through a direct appropriation. Co- Chair Hanley compared the situation to that of gaming permits. Representative Brown pointed out that a state asset is being auctioned. Co-Chair Hanley acknowledged that the constitutional question needs to be addressed. He stressed that the legislation addresses other issues. Representative Therriault questioned if a permit to hunt moose would be considered an appropriation of state resources. Representative Brown pointed out that the winner of the raffle receives a free hunting license and tags. Representative Therriault responded that the winner has paid a fee in the cost of the raffle. Representative Therriault asked for details regarding 5 changes made by the House Resource Committee. Representative Bunde noted that the definition of a qualified organization was added and the State's share changed from 50 to 90 percent. Representative Grussendorf pointed out that a hunting license does not allow an auction to the highest bidder or the sell of the meat harvested. He expressed support for the concept of HB 59. He questioned if the Department of Fish and Game will be able to monitor the hunts. He observed that bison and musk ox hunts are not generally available and would raise larger sums. Representative Bunde acknowledged that these permits would be new but asserted that there are precedents in Alaska and other states. He explained that the Governor may issue special hunting licenses to visiting dignitaries. He emphasized that most bidders would be wealthy individuals that would consider their participation a form of philanthropy. Representative Brown noted that individuals living in and out-of-state could participate. Representative Brown noted that wolves would be classified as both big game animals and predators under separate pieces of pending legislation. She questioned how the status of wolves would be classified. Representative Bunde noted that if wolves are not a big game animal a tag cannot be issued. Representative observed that subsection (c) would exempt these activities from AS. 05.15. Brown asked why the raffles would be exempted from existing regulation for games of chance and skill under the Department of Commerce and Economic Development. She questioned why regulatory oversight would not be maintained. Representative Bunde could not recall why subsection (c) was included. Representative Brown expressed concern that a competitive auction or raffle could be issued to an organization without competition from other organizations. Co-Chair Hanley referred to page 2, lines 10 and 11. He noted that "the department, subject to regulations adopted by the commissioner, may issue, (a permit) through a competitive auction or raffle". Representative Bunde asserted that it is in the Department of Fish and Game's best interest to have competitive bids. WAYNE REGELIN, DIRECTOR, DIVISION OF WILDLIFE CONSERVATION, DEPARTMENT OF FISH AND GAME noted that current statutes allow one permit to be auctioned from the Delta Bison herd. He observed that Safeguard is the only organization that currently qualifies for this permit issuance. He stated that this statute is being expanded by request from other 6 groups. He pointed out that several groups use raffles or auctions of big game licenses to raise funds for their organizations and to help wildlife management. Mr. Regelin noted that the original bill allowed a 50/50 split between the organizations and the Department of Fish and Game. He observed that federal law stipulates that only 10 percent of the funds can go to a licensed vendor. Ninety percent of the funds must go into the Fish and Game Fund. He maintained that the Department will establish specific regulations governing how the permits would be issued. Mr. Regelin noted that the judges allowed those convicted of a fish and game violation to either make a donation to Safeguard or write a check to the State. The audit referred to this practice. Mr. Regelin noted that donations to Safeguard in lieu of a fine are longer allowed. Representative Brown noted that the Legislative Budget and Audit report references raffles by Safeguard on page 8. She added that the audit also points to free advertising provided to Safeguard by the Department of Fish and Game. Mr. Regelin maintained that these problems have been resolved. He emphasized that Safeguard is a private nonprofit organization that is very beneficial to wildlife management through enforcement. Co-Chair Foster questioned if IRA Councils would qualify. Mr. Regelin stated that a qualified organization refers to a nonprofit corporation established to promote fish and game law enforcement or an organization that is established to promote management of hunted game species and the use of game populations for hunting and that complies with applicable laws governing activities under subsection (b). He did not think that Native nonprofit groups would be covered. He stated that Safeguard, the Safari Club, North American Elk Foundation and the Wildlife Sheep Foundation would qualify. Co-Chair Foster noted that Kawerak a regional Native nonprofit corporation has a branch which cares for the local reindeer herd. Mr. Regelin stated that the Department of Law would determine if they would be eligible. He emphasized that organizations do not receive a large percentage of the proceeds. Organizations do receive publicity from the raffles. In response to a question by Co-Chair Foster, Mr. Regelin stated that the Department supports the legislation. Representative Bunde gave examples of funds raised by other states. He noted that the state of Montana raised $789.0 thousand dollars. Co-Chair Foster asked if Mr. Regelin foresaw a musk ox raffle in the Nome area. Mr. Regelin replied that he did 7 not foresee a musk ox hunt in the Nome area due to dual management with the federal government. He emphasized that permits would be issued in areas where there is not a lot of competition. In response to a question by Representative Grussendorf, Mr. Regelin noted that the Department of Fish and Game has no authority over reindeer. He noted that there are musk ox hunts in three locations in Alaska. (Tape Change, HFC 96-26, Side 1) Mr. Regelin stressed that hunts by nonresidents must be guided. He explained that the hunt would be included in the guide's hunt limit. Representative Brown questioned how the current process works and how the program would be expanded. Mr. Regelin noted that the only organization that qualifies under current law is Safeguard. He stated that regulations have not been established. In response to a question by Representative Brown, Mr. Regelin reiterated that regulations have not been implemented. He emphasized that the organizations in question do have Alaskan branches. He maintained that the Department has a good working relationship with the organizations which would qualify. Mr. Regelin explained that the exemption in subsection (c) was inserted at the request of the Department of Commerce and Economic Development. Representative Brown questioned the rationale for the exemption from oversight by the Department of Commerce and Economic Development. Mr. Regelin could not respond. He stated that an organization would have to provide an accounting of their expenses. Representative Brown restated that Safeguard would be taken out from under the review of the Department of Commerce and Economic Development. DWAYNE BUELL, LOCAL CHAIRMAN, ALASKA FISH AND WILDLIFE SAFEGUARD testified in support of HB 59. He stressed that Safeguard has been active in promoting fish and wildlife enforcement since 1989. He emphasized that Safeguard provides a 1-800 telephone number that allows citizens to report illegal activities. He stressed that the fine diversion activities referred to in the audit report were stopped. He observed that Safeguard is unable to make use of direct contributions which were given out as prices. He asserted that Safeguard has raised over $4.0 million dollars for the State through fines and confiscated property. 8 Mr. Buell noted that a part-time coordinator hired by the Department of Fish and Game worked with Safeguard. Due to objections this position no longer works with Safeguard. He stressed that the Bison raffle does not provide sufficient return for the amount of work required. He observed that the sale of a poster by Safeguard and advertised by the Department of Fish and Game has also been discontinued. In response to a question by Representative Brown, Mr. Buell stated that Safeguard is not planning to expand their raffle activities. He theorized that the exemption in subsection (c) could increase their competition from other organizations. He noted that organizations requesting permits under AS 05.15 would have to be in existence for two years. Co-Chair Foster expressed support for HB 59. He expressed concern that permittees be accompanied by a licensed guide. Representative Brown noted that the program will be expanded. She expressed support for regulation by the Department of Commerce and Economic Development. Co-Chair Hanley noted that the legislation requires that permittees be subject to regulations adopted by the commissioner of the Department of Fish and Game. He observed that permittees would have to apply with the Department of Commerce and Economic Development and the Department of Fish and Game if subsection (c) is deleted. Representative Brown responded that there needs to be someway to account for the money to make sure that the State receives the money it is due. Co- Chair Hanley pointed out that the Department of Fish and Game oversees a variety of licenses and permits. Representative Bunde expressed confidence that the State's interests will be adequately safeguarded by the Department of Fish and Game. Representative Mulder MOVED to report CSHB 59 (RES) out of Committee with individual recommendations and with the accompanying fiscal note. There being NO OBJECTION, it was so ordered. CSHB 59 (FIN) was reported out of Committee with a "do pass" recommendation and with a fiscal impact note by the Department of Fish and Game.